Talent crunch hobbles construction boom

Increased mechanization, a national shortage and an unusual occupation have made Rajesh Yadav, 29, indispensable to his employers.

A high-school graduate from Khorabar village in Uttar Pradesh, Yadav is an operator who helps hoist beams with the use of a Rs6 crore crane for the 27.7km expressway on NH-8 that connects New Delhi to nearby Gurgaon in Haryana.

But the Rs25,000 Yadav makes a month, or the number of standing job offers in a country starved of skilled workmen in its booming construction industry, is seemingly not a sufficient incentive for more people to join the trade as a booming economy throws up alternative career options.

Industry executives say that the problem is exacerbated by the fact that state-run industrial training institutes (ITIs) —which traditionally supplied these personnel—and a handful of schools dedicated to the construction trade prove inadequate, forcing many companies to set up training institutes of their own.

Nationwide estimates on the number of crane and heavy machinery operators are hard to come by but industry officials are unanimous about one thing: the country needs more manpower to complete the mammoth infrastructure development programme envisaged to cost nearly $320 billion (almost Rs13 trillion) over the next few years.

The shortage takes on particular significance as a number of huge projects come on line. The National Highways Authority of India is expected to open longer road stretches for bids to widen and improve them, and several of the approved special economic zones are expected to start development work in the next three to five months; this is apart from ongoing infrastructure work in pipelines, power, ports and refineries.

For specialized skills, companies traditionally looked to graduates with trade diplomas from the ITIs.

But increasing mechanization and outdated syllabi have made them less relevant.

“Industrial training institutes are woefully inadequate,” says K. Rangaswami, president of Larsen and Toubro Ltd’s construction division and a member of the Construction Industry Development Council, an organization set up in partnership with the Planning Commission. “ITIs need to be able to graduate men trained in trades every three months. That is one way to fight the shortage.”

Things are made worse by the speed at which the country’s large construction companies are adding projects. Larsen and Toubro, one of India’s largest engineering and construction companies, has orders worth Rs25,000 crore, at least half of which it needs to fulfil in the next year; D.S. Constructions Ltd, with interests in roads, railways, hydro-electric power projects and special economic zones, has projects worth Rs27,000 crore; Soma Enterprises, an infrastructure major, has an order book of about Rs6,500 crore. And they are adding more every month.

The three companies together employ more than 200,000 people. India employs approximately 31 million people in the construction industry.

To mitigate the shortage, Larsen and Toubro plans to start 10 new training centres across the country with an outlay of Rs5 crore per centre. This is apart from the two such centres it already runs in Mumbai and Chennai, which equip 1,000 people with trade skills every year. Rangaswami reckons the company needs 20 times as many. Similarly, D.S. Constructions is starting a training centre at Gurgaon which will provide six months to a year of training for 400 people.

“There is significant automation in this industry. Now, we are having to send them (operators) to our equipment manufacturers for training,” says Ashok Sehgal, senior vice-president, human resources for D.S. Constructions.

“This is a very capital-intensive industry. Some of these assets are very expensive,” points out T. Krishna Rao, deputy general manager, human resources for Soma Enterprises. “All training is hands-on, with a helper often graduating to driving vehicles.”

Pay hikes of as much as 40% aren’t helping either as the industry struggles to keep pace with the infrastructure boom. Salaries for certain classes of jobs have risen from the Rs10,000-14,000 range to as much as Rs25,000.

The skilled manpower shortage is also fuelled by the rising demand for mechanized loaders and excavators.

“While the construction equipment market in the US is declining, in countries such as India, China and Russia, business is booming,” Amit Gossain, general manager, marketing for J.C. Bamford Excavators Ltd’s India operations had said in an unrelated telephone conversation on 18 May.

The company, which is popularly known as JCB, is one of the world’s largest suppliers of construction equipment. It sold 10,500 units of its loaders and excavators last year and expects to do at least 35% more business this year.

In order to keep up with demand, the company is adding 1,500 employees across its two plants as well as increasing support infrastructure such as dealers and service outlets in the country.

Part of the problem is that the companies are working to tight deadlines and face fines for not completing the project on time, even as they cope with growing demand from new projects as the Indian economy poises to cross the trillion-dollar mark. “If I take a job, then no matter what happens, I have to finish it,” said Larsen and Toubro’s Rangaswami.

The Delhi-Gurgaon expressway where Yadav works was scheduled to be completed by mid-2005, when increased traffic between the Capital and its tony suburb caused the company to redraw plans.

Which is why Yadav, and the two other crane operators he helped train, work round the clock as the company pushes to complete work by the new scheduled completion date of September this year. “Some time back, we worked three days non-stop to hoist 20 beams onto the flyover. The work would usually have taken 20 days,” Yadav says.